The TLDR: Four of the most powerful men in the world—Jeff Bezos, Tim Cook, Mark Zuckerberg and Sundar Pichai—will be grilled in full view of the world today. All four will simultaneously testify in front of the US Congress—which is investigating them for unfair business practices. The reason this matters: It could lead to legislation that forever changes the landscape of the global tech industry.

What’s happening here?

For more than a year, members of the US Congress have been investigating the big four: Apple, Facebook, Google and Amazon. They have conducted hundreds of hours of interviews and collected more than 1.3 million documents. Now, the House Judiciary Committee has summoned their CEOs to defend their business practices—side by side on a video conference call. Verge describes it as “15 prosecutors trying four murder cases simultaneously ... on Zoom.”

What are they accused of?

As you know, each of these companies has a very different business model. But all of them are charged with the same crime: using their sheer size and clout to kill competition and gain unfair advantage—which in turn does grave disservice to their consumers. In other words, they are accused of behaving like a monopoly. 

A monopoly? By acting together?

No, they are not accused of colluding with one another. Each of the companies faces a separate set of allegations.

The charge against Amazon: centres on how the company treats sellers on its platform. 

• Amazon is the single-largest e-commerce platform in the world. Just in the US, it accounts for 40% of all e-commerce spending. So companies can’t choose not to be on the platform. 
• Sellers have complained about being forced to sell at unreasonably low prices. Also: Amazon allows sellers to hawk fake knockoffs of their product.
• But more importantly, Amazon also sells its own products on the same platform. And it has total access to data on rival products—sold by its own clients, i.e. other sellers.
• In April, Wall Street Journal showed that the company was using that data to develop its private-label products. 

Amazon’s defence: Last week, it released a report that showed sales by third-party sellers grew 26% on its platform—rising faster than the sales of Amazon’s products.

The charge against Facebook: is straightforward: It’s way too big. It owns 80 companies—including the biggest social media networks in the world. FB aside, Instagram and WhatsApp each have more than a billion users. Each time the company faced a rival, it just bought the pesky upcomer out.

And that monopoly has nurtured an epidemic of fake news, often used to interfere in elections around the world. Facebook’s misuse of user data is just the cherry on this gargantuan social media pie.

Facebook’s defence: TikTok. See? There’s competition for you!

The charge against Apple: centres on its App Store—through which it controls access to 900 million iPhone users. A good example is Spotify which has filed an antitrust complaint against Apple in the EU. 

• Spotify says it had to price its service higher in order to pay Apple’s mandatory share of its revenue—which is 30% for all paid apps. 
• Then Apple undercut Spotify by launching Apple Music at a lower price. 
• When Spotify pulled out of the App Store in response, the company made it harder for iPhone users to sign up for the service. 
• Apple is also accused of ripping off the best features of most promising apps in its store—and offering them preloaded on the iPhone. For example, period trackers and flashlights.

Apple’s defence: The 30% ‘Apple tax’ is, in fact, the industry standard. What it fails to mention: Apple helped set that industry standard. 

The charges against Google: are wide-ranging since it dominates almost every part of the tech industry. But the questions will likely focus on two areas. One is search: 

“In its early days, using Google usually meant searching for something and then clicking a link to another website. But increasingly, businesses and rivals complain that Google has designed its search engine in ways that benefit Google at their expense. 

 

Today, ads dominate the top of search results like never before, which puts pressure on companies to pay to be seen. Organic results meanwhile appear to favor Google’s own properties: Google reviews instead of Yelp, YouTube instead of Vimeo, and so on. 

 

And the answer box, which pulls information from other websites, keeps users on Google, rather than clicking away, which in turn means more opportunities for them to click on ads.”

All of which also helps explain why Google search sucks for the rest of us. 

The other big problem is Google’s overwhelming dominance of digital advertising—which extends far beyond search ads. It also controls YouTube advertising. And it has bought up smaller companies that make tools businesses have to use when they buy or sell advertising. A UK investigation found that it makes an astonishing 42 cents on every ad dollar that is spent. The size of the global digital advertising market: $162.3 billion.

Google’s defence: Amazon. Company lobbyists pointed out that more than half of all searches for products on the internet happen on its platform.

So this hearing will change all that?

This is a momentous event. Just the sheer spectacle of these four tech titans being hauled up for questioning—all at the same time—will have an impact. As one tech analyst explains:

“The CEOs don’t want to be testifying. Even having this collective hearing creates a sense of quasi-guilt just because of who else has gotten called in like this—Big Pharma, Big Tobacco, Big Banks… That’s not a crowd they want to be associated with.”

They look guilty just by the very fact of their presence. And the questions are hardly likely to be friendly. Almost no one—either Republican or Democrat—likes big tech. 

But most importantly, the hearing will likely create momentum for greater regulation by Congress—and new federal and state investigations into each of these companies. 

The bottomline: These four companies touch the lives of billions of people around the globe. What comes out of this hearing will have a huge impact on all our lives. PS: You can watch the tamasha as it unfolds later today over here.

Reading list

• New York Times has the best overview, but for a non-paywall read, check out CNN.
• Wired does the best job of laying out the charges against each company. For a more detailed version of the same, check out Protocol.
• Axios does a neat job of summarising what each company does and how they make their money.
• Recode dives into Apple’s legal troubles. Politico does the same for Google.
• Also worth a read: Buzzfeed on the employee rebellion against Facebook’s policies.
• Wall Street Journal’s investigation in April found that Amazon scooped up data from its own sellers to launch rival products—and sparked much of the current troubles.